Mutuality of Obligation


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Mutuality of Obligation

The state in which both parties to a contract are required to perform some service. For example, one party may make a widget and the other may pay for it. Mutuality of obligation is one of the conditions that must exist for a contract to be legal and enforceable.
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References in periodicals archive ?
39) The mutuality of obligation approach (which is not currently the law) would extend First Amendment protection in this context.
The problem with XYZ enforcing its triangular setoff rights is that one of the prerequisites for setoff, a mutuality of obligations between the parties to the setoff, is lacking between XYZ and ABC'S affiliate because the claim XYZ is seeking to setoff against its obligation to ABC'S affiliate is against ABC.
The trustee did not challenge this asserted setoff right because of the mutuality of obligations between LBI and UBS.
But New Delhi would be mistaken if it thought that there was an identity of interests and mutuality of obligations between us right now.
The result: the mutuality of obligations applied by the court in the Ticknor case may be deemed unconscionable if applied to franchisees' duty to mutually share arbitration costs.
The problem with the creditor's enforcing its triangular setoff rights is that one of the prerequisites for setoff, a mutuality of obligations between the parties to the setoff, is lacking between the creditor and debtor's affiliate.
The court first found no mutuality of obligations where the parties had entered into a multi-party agreement that allowed for setoff of their non-mutual debts.
The Bankruptcy Court found no mutuality of obligations between the severance and relocation expenses that Ferguson had claimed against GRP and Ferguson's obligations to GRLP under the Note.